These limiting labor issues slow productivity, often reduce KPI achievement and most often increase labor costs, none of which achieve pressing business objectives and customer experience targets. For businesses with peak seasons and labor-intensive processes, the use of contingent workers adds additional challenges of training, accountability and management.

What if these labor issues could be solved, not by addressing each one individually, but by changing how we view the problems?

The Solution
Meet Bob Duron …previous General Manager/Vice President at Walmart, GAP, Amazon, DHL/Excel, and Americold. Bob has a reputation for significantly reducing labor costs while increasing productivity and quality standards, without major capital improvements of automation, robotics or software systems. What does he know that others don’t?

While at Walmart.com a persistent salesperson finally convinced Bob to test an unconventional labor model pioneered by staffing expert David Hair and Industrial Engineer Jim Zimmerman, now principals of nGROUP performance partners, a national workforce solutions company based near Charlotte, N.C.

According to Hair, the uniqueness of the labor management model began by looking first at the human being that is performing the labor-intensive processes, common to warehouses, distribution centers, assembly lines and other labor-intensive environments.

David and Jim looked for answers to the daunting question, “What motivates unskilled or semi-skilled contingent workers to achieve higher productivity at quality standards?” Once they discovered the multiple layers that answer this question they created the Human Performance Coaching methods that help the model achieve its stellar results.

But even these excellent practices weren’t responsible for the magic Bob discovered that allowed him to immediately reduce labor costs a minimum of 10% while increasing productivity 20-25%.

The Magic of the Solution
The magic happened, according to Jim and David, when they finally let go of the current best practices of accounting for labor cost on the P&L. “We had to rethink how to build accountability into the labor management model – until we could tie how much was produced to the cost of labor we knew it wouldn’t achieve what we wanted to achieve. We ended up dusting off the method used by farmers decades earlier. Farmers would often pay their workers a flat fee for a unit of production – for example – X dollars for picking one basket of fruit. “If we could create the financial reporting to make this work, we could incentivize workers for “picking more fruit.” It was called a fixed-cost-per-unit payment.

Once David and Jim began implementing their fixed-cost-per-unit model with clients, the finance and accounting groups were also thrilled. By guaranteeing a cost per unit produced, that included labor costs which were often the largest variable, the accuracy of budgeting and forecasting were immediately increased.

Today nGROUP continues to help clients solve frustrating labor issues and achieve significant cost savings with their unique labor management model, called Labor Unit Economics. Sophisticated engineering technology and labor BI management technologies, along with powerful recruiting and Employee Engagement programs have been added to meet today’s demands, but the magic is still in the model, according to David and Jim.

Solution Meets Magic
And what happened to Bob Duron? On January 2, 2018 Bob joined nGROUP as Chief Operating Officer, and is eager to share the nGROUP Unit Labor magic with outstanding companies across the country.

For a confidential conversation about your pressing labor and productivity challenges, please contact nGROUP performance partners at 678-644-2208, learn more at nGROUP.biz, or email Bob. BDuron@nGROUP.biz.

We are all feeling the labor crunch. It’s hard to recruit, train, retain and make progress all at the same time. All of these labor challenges boil down to the fact that we are tasked with developing a rapport AND a system of accountability with the workers that ultimately determine our success. At nGROUP we have taken on such challenges and created a labor model with specific tools and competencies that maintains flexible staffing while delivering the performance and quality that companies seek – with less sweat.

Contemporary Labor Challenges

You need a flexible workforce that is productive and effective. Companies have long used temporary staffing to meet the ebbs and flows of their business to control their labor cost. Using temporary staffing allows the client to match labor supply with production demands but at a cost. A temporary worker lacks the loyalty, commitment and training of a full time worker and companies become frustrated with the turnover dilemma. The dilemma is many temps are not qualified or dependable and are terminated for poor performance and the better temps leave for fulltime work.

You need to recruit and retain a workforce in a competitive labor environment while controlling cost. Record low unemployment levels have made recruiting and retaining a quality workforce extremely challenging and costly.

nGROUP’s highbred workforce model delivers the performance and quality that you need without the cost and risk of traditional staffing. Simply put, we hire, train and retain a productive workforce that is managed by lean six sigma experts that make progress possible and immediate.

Our team of Certified Lean Six Sigma experts and industrial engineers optimize complex processes, systems and organizations by eliminating waste of time, money, materials, man-hours, machine time, energy and other resources that do not generate value to your overall objectives.

In such, it takes more than just managing HR to make the significant impact we deliver to our clients. We are able to recruit and retain high performance workers with competitive pay and benefits and help them with their career growth. This bottom up approach delivers a workforce that skilled, recognized, rewarded, consistent and productive.

A Case Study

A large automotive tier one supplier in the Southeast was being challenged to meet their clients’ needs. They were having difficulty keeping up with demand because of labor supply and subsequent shortfall in headcount and their margins had eroded significantly due to labor cost.

They were being squeezed to increase pay to improve recruiting but the higher wage rate would erase what little profit margins were there. They utilized staffing companies because the markup and hourly cost was much lower than the loaded hourly rate of full time employees but the productivity suffered and turnover was high.

We collaborated with the client to design an approach that would address the labor challenges they were experiencing. The client gave us the responsibility of managing one building. We brought in our engineers and management team to develop and document best practices within the facility and create an incentive pay program that rewarded performance, attendance and attitude.

In addition, we developed a comprehensive worker engagement program that worked to assist in better recruitment and retention. Workers began earning more money through the incentive program and individual productivity increased 36%. Attendance and retention also dramatically improved.

The net result for the client was a sharp improvement in meeting client service levels and a 9% cost reduction in unit labor cost.

For a discussion about your labor, production and cost challenges please contact Ryan Cates, VP, nGROUP performance partners at 803-367-2469 or rcates@ngroup.biz.

In the world of food processing and packing, we spend a great deal of effort focusing on production efficiencies and lowering labor cost per unit to improve profitability. However, fresh food processing presents a number of challenges that requires additional focus on improved product yield.

The challenges of fresh food processing are obvious. Our products fluctuate in availability and demand based on seasonal harvest. And most impactful is the fact that our product has limited shelf life. These obvious traits of the industry simply means we have less room for error as it pertains to processing and getting our end product to market. Not so obvious is the long-term, micro-level planning that needs to take place in order to eliminate waste; thereby increasing our yields and profits.

Of course eliminating product waste requires focus on improved cutting techniques, grading diligence and understanding the client’s needs. But to truly impact improved product yields, operation managers must develop a yield culture over a period of time and apply this top-of-mind awareness to all areas, including pre and post-production. Yield initiatives should also focus on:

Education: It is imperative that from the beginning to the end of the process that everyone is educated on how they impact yields. This includes sales people and account managers.

“Pay attention to details. The most important things are often overlooked in the search for things greater than the obvious.

” -Anonymous

When I read the above quote, I literally laughed out loud. The notion of observing the obvious reminded me of a recent On-Site Feasibility Study that a colleague and I conducted for a national apparel retailer.

One process that we observed was workers hanging garments. It immediately struck us – the majority of the workforce at this particular facility was petite. They literally struggled to reach the hanging racks. Once we began managing the production at this facility, one of the many “granular” changes we incorporated was lowering the racks. Productivity in this work cell increased immediately and as you can imagine the shorter than average workers were pleased that the “obstacle” was eliminated.

In another instance, we were conducting micro-movement studies at a reverse logistics company in order to realize efficiency objectives. The process involved picking parts. Parts could be picked from a shelf or a pallet. At the end of our study we factually discovered that workers were 25%-30% faster when they picked the part from a shelf. Logistical shifts in placement between human and object would allow for a significant increase in productivity.

Human factors and ergonomics (commonly referred to as HF&E) has gained attention in recent years but mostly in the area of comfort and occupational health and safety. As the two case studies mentioned above illustrate, human ergonomics is also the practice of designing systems and process that take proper account of the interaction between them and the people who use them.

The question becomes, have you truly observed your processes on a micro-level and would those observations result in a redesign or a small modification that could yield goal achieving results in 2017? To learn more about how our Operational Diagnostic can lead to such positive adjustments to help your team achieve more, visit our booth at the upcoming RILA conference in Orlando.

nGROUP executives will be attending the RILA supply chain conference February 12-15. If you would like to schedule an appointment to discuss how micro-movement studies can positively affect your objectives, please contact Ryan Cates rcates@ngroup.biz . See you in Orlando.

About nGROUP
As an on-site insourcing partner, nGROUP works with companies in a consulting or vested partnership relationship. For over 10 years, the nGROUP Performance System has been adopted by executives in labor intensive industries to meet and exceed corporate objectives. NPS consistently outperforms other methods, increasing productivity, quality, and morale, and reducing labor costs by a minimum of 10-25%.

As Steve Jobs once said, “Design is not what it looks like. Design is how it works.” So when we ask, would your distribution center or warehouse win best in design, the real question becomes, is your facility designed to succeed in meeting your 2017 objectives?

Clearly the designing phase of establishing a production system is the most important since most of the strategic and tactical decisions take place during this phase. While several academic studies seek to find a one size fits all solution to warehouse design, each industry and facility offers unique opportunities and challenges.

Despite the necessity to create custom designs to meet specific objectives, a general guideline keeps management on task when making crucial decisions. As reported by MHLnews.com (Material Handling & Logistics), there are seven essential steps in redesigning a warehouse.

Identify and Document Areas for Improvement

Gather Facility Information and Data

Analyze Collected Data

Develop a Thorough Plan

Plan the Implementation Process

Conduct a Post-Project Review

Throughout our 10 years in partnering with operational facilities, we have seen over and over how the smallest adjustments of motion or placement can dramatically impact bottom line results. Conversely, we have seen how the refusal to “switch things around” stifles a company’s ability to meet their objectives.

At one large distribution center for SONY, we found by rethinking the production flow we could not only improve productivity but improve space utilization by 30% saving the need for outside overflow space.

nGROUP Executives will be attending the RILA conference February 12-15. If you would like to schedule an appointment during the conference to discuss 2017 facility design trends, our contact information is below or simply respond to this email. Don’t want to wait until February? Give us a call for a brief phone conversation prior to the conference. See you in Orlando.

About nGROUP As an on-site insourcing partner, nGROUP works with companies in a consulting or vested partnership relationship. For over 10 years, the nGROUP Performance System has been adopted by executives and managers in labor intensive industries to meet and exceed corporate objectives. NPS consistently outperforms other methods, increasing productivity, quality, and morale, and reducing labor costs by a minimum of 10-25%.

Are you heading into 2017 with new challenges and aggressive corporate objectives? If so, you have probably completed detailed research, developed strategies, and lead countless meetings in preparation to facilitate change in your labor-intensive operations. But have you given thought to how you are going to create the energy necessary for change to truly take place – not just on paper – but in the minds and habits of your workforce? In other words, positive and lasting change requires positive and lasting energy to be accepted and adopted at an individual level.

In order to gain the best performance possible from your labor force you must align their motivation with your objectives. This means that workers must be clear about the company’s objective – crystal clear – and that those goals are part of your production benchmarks that are monitored and shared with the workers DAILY!

Whether you share production reports daily in a meeting or create a powerful display on your production floor, the communication and the vibe you put forward must be individualized to the worker – crediting them as individuals or praising the performance of their shift over another. There is one clear way to know if you are motivating your workforce. If you were the proverbial fly on the wall in the break room, would you hear your workers discussing their performance?

When we first partner at a new facility, we often see the remains of production performance charts that are intended to motivate the floor workers. Too often managers capture data sporadically and worse they don’t share the data with the workers on a consistent basis. News flash – only the workers can affect the outcome of your goals. It is the “duty” of the manager or supervisor to create the energy that motivates the worker. This requires constant monitoring of performance, necessary adjustments that are preventing success, and above all – holding the workforce accountable in a positive, productive manner.

The last consideration for creating a high energy workforce that exceeds your expectations, is to reward your workforce with both praise and pay using a cost per unit model. In facilities where the nGROUP performance system is utilized, ‘Pay for Excellence’ reinforces that each teammate is an essential part of the team, and is rewarded with incentive pay for their excellent performance. Above all our approach is to create positive, encouraging goal-oriented environments and coach teammates how to work smarter to achieve greater success for themselves and your company.

nGROUP Executives will be attending the RILA conference February 12-15. If you would like to schedule an appointment to discuss 2017’s trend setting labor production methods during the conference, please contact Vice President Ryan Cates at rcates@ngroup.biz. Don’t want to wait until February? Give us a call for a brief phone conversation prior to the conference. See you in Orlando.

About nGROUP
As an on-site insourcing partner, nGROUP works with companies in a vested partnership relationship. For over 10 years, the nGROUP Performance System has been adopted by executives and managers in labor intensive industries to meet and exceed corporate objectives. NPS consistently outperforms other methods, increasing productivity, quality, and morale, and reducing labor costs by a minimum of 10-25%.

Often our New Year resolutions have more to do with our personal lifestyle choices than it does our business related choices. Regardless, the objective is the same – to implement and reap the benefits of positive change. As we begin the New Year, have you considered how to facilitate positive change for your labor-intensive operations?

In the weeks leading up to the Retail Supply Chain Conference, we are going to share some information about implementing process improvements based on the latest trends and technology. Below is a list of topics that we will explore. We hope this information provides useful information that results in not just meeting 2017 expectations – but exceeding those expectations.

New Year, New Energy: Positive change requires positive energy. How are you going to create positive energy amongst your managers and workers?

Distribution Center Design: Would your facility win best design and what would it look like?

Human Ergonomics: Have you observed the efficiency of your worker’s movements on a granular level?

On-Trend or Trend-Setting: Is your distribution center poised to implement acceptable improvements or are you seeking to go beyond the range of acceptability?

Finding the Right Fit: What is out of date in your warehouse? Is there a better fit or an improved flow that you can implement during 2017? Does you labor supplier still meet your needs? Can you do less to achieve more?

We look forward to seeing you at the 2017 Retail Supply Chain Conference in Orlando and

One of the benefits of attending this year’s Council of Supply Chain Management Professional’s Conference (CSCMP) was learning about trends that are on the horizon in the world of logistics. One such change is how technology is enabling companies to connect based on need and availability.

On a basic level, business models such as Uber and Airbnb put consumers in touch with service providers that have openings. For Uber, consumers are connected to drivers with the touch of a button. Only the drivers that are nearby and have available time respond to the consumer’s request. Conversely, Airbnb connects travelers to accommodations that are relevant to their desired location and can quickly see if the timeframe is available.

In the same respect, warehousing and distribution centers have situational or seasonal demands such as trucking and varying needs of warehouse space. Emerging to fulfill these needs are companies that make transportation and warehouse space available on an as need basis; and like Uber and Airbnb, technology facilitates the availability and scheduling.

One such logistics provider is “Quick Transport Solutions.” As described on their website, “We are your one-stop-shop for everything you need to run your transportation and freight logistics business. Our website allows you to post load or find trucks, post trucks or find loads . . .” For the most part, flexible transportation services are available on a regional level so a little research can put you in contact with a quick source for varying transportation needs.

Flexible warehouse space is a more widely known option; however, the communication platform (online and mobile scheduling) is expected to grow as companies look for low risk options for cost savings.

Regardless of how fast and wide spread online and mobile booking of logistics services becomes, I fully expect more national players to seize the opportunity to provide convenience and creative approaches to deliver more services on an as needed basis.

Executive Vice President Diron Raines leads client partnership engagement for nGROUP. Raines manages assessment and benefits case development to ensure a good fit prior to initiation of projects. He brings years of senior management expertise in strategy practice for a Big Four consulting firm, developing portfolio strategies, manufacturing strategy, operations planning and shareholder value analysis.

About nGROUP For over 25 years, the nGROUP Performance System for labor intensive functions has been adopted by executives in manufacturing and distribution facilities to solve business issues and achieve corporate objectives. As a consultant or on-site outscouring partner, nGROUP consistently outperforms other production methods, increasing productivity, quality and morale, and reducing labor costs by a minimum of 10-25%.

During the recent Council of Supply Chain Management Professional’s Conference (CSCMP), I had the pleasure to attend a breakout session conducted by Scott Graves, a PhD candidate at the University of Iowa. Graves presented his research on the pros and cons of Onsite Outsourcing – what we at nGROUP call Insourcing.

Naturally this was of interest since it is what we do here at nGROUP. The spin was a little different in that it focused on transportation, whereas nGROUP focuses on labor inside the warehouse or plant. Despite differences in tasks, the relationship is the same; a third party operates within the four walls of a client’s facility alongside their team.

The subjects for the study were IPC, a Subway franchisee owned organization that handles their logistics, and CH Robinson, a 3PL that has a team in IPC’s facility working alongside their team to manage IPC’s transportation.

Grave’s findings were insightful and consistent with our experience working with clients.

Based on his research Insourcing yields increases in the following areas:

Loyalty between client and vendor

Visibility both ways (client/vendor)

Responsiveness in reaching objectives and overcoming challenges

Innovation in finding solutions (Thinking outside of the box)

According to Graves, there are four key considerations for insourcing success:

Task and Outcome Dependence – Dependence forces interaction and engagement between both teams

Role Clarity and Autonomy – It is essential that roles of the third party onsite team members are clear and they are able to carry them out independently.

Commitment – Client teams need to have a sense of accountability for the program’s success.

Physical presence – Third parties should have a designated area that is their own to work in but provides easy access to the internal team.

Most prevalent negatives when it comes to insourcing:

From a client perspective, there are barriers to exiting the relationship.

From a vendor perspective, they often find themselves giving away services that are not part of the compensation agreement.

The finding that resonated with me the most was the idea that Insourcing yields innovation; an elusive and highly valuable byproduct that is desired by every company. What companies are innovative to you? I bet it’s a who’s who of industry that comes to mind (Apple, Tesla, Google, Amazon…).

The concept that insourcing and innovation go hand in hand makes a lot of sense. Third parties like nGROUP can bring a greater depth of expertise in a particular area. In addition they have more focused resources that can speed up the rate of iteration.

In our world that means combining our operations management expertise with our client’s inherent knowledge of their business to develop new strategies. Then our implementation team can focus on the execution and ongoing management, while our clients focus on improving another critical area of their company.

Ryan Cates is Vice President with nGROUP performance partners. As an insourcing partner, nGROUP works with companies in a vested partnership relationship. For over 25 years, the nGROUP Performance System (nGPS) has been adopted by executives and managers in labor intensive industries to meet and exceed corporate objectives. nGPS consistently outperforms other methods, increasing productivity, quality, and morale, and reducing labor costs by a minimum of 10-25%.

If you are like me, you are elated to hear the introduction song to Monday night football; look forward to ESPN’s College Game Day and get a little upset when the Fantasy Football app doesn’t work. As hard as I work during the course of the week, I look forward to pulling for my favorite teams during the weekend and recharging for the next week’s challenges.

I live in the South so this is also the time of the year that I need to repair my lawn from the harsh heat of the summer and do all the things that will ensure a green lush lawn come Spring. The problem is I’d rather turn my attention to football. I’m certainly more productive on Mondays if I’ve had a relaxing weekend. Last year I made a decision that ensures I could watch football without the pressure of yard work calling my name. I outsourced the care of my lawn.

Sure I can fertilize, put down pre-emergent, aerate, seed, etc. myself. Performing these tasks are not of particular interest, not something I enjoy, nor do I regard it as a good use of my time. The service on the other hand takes pride in their abilities, invests in the right materials and equipment, and will gladly perform the service for not much more than it used to cost me in materials and equipment. And honestly the yard looks better. By outsourcing, I met both of my objectives – a beautiful lawn and a recharged mind and body.

Every executive overseeing distribution and manufacturing operations has similar sentiments towards some area of their business; it’s important but they’d rather focus on other things; it’s generally painful to deal with, and someone else would probably do it better.

The concept of outsourcing a task, a work cell or even an entire operation is certainly nothing new. However, the landscape of outsourcing options has changed dramatically during the last decade. Most notably, insourcing has become a popular and effective way to meet corporate objectives by delivering record-breaking results and eliminating headaches while maintaining control on-site.

What is insourcing? Insourcing is when a third party manages a process inside a company’s facility, often alongside other processes that the company continues to manage. Traditional outsourcing is when a third party manages a process outside the company’s facility which is typically wholly managed by the third party (see comparison chart below).

Executives may choose to go the insourcing route because they’re concerned about loss of control and protecting the customer experience. There could also be issues with utilization of assets like real estate or equipment that the company is committed to use. Or the process they’d like to outsource may be a part of a series that it needs to remain close to. Whatever the case; they need it to stay in-house.

Conversely, the traditional outsource model means that the operation takes place in a separate facility with their own management, transportation and labor resources. Often the outsourced operation is not in even in the same city as the company.

Insourcing as a business model does provide many of the same benefits as traditional outsourcing while remaining at the company’s site. There’s a contractual agreement to a specific cost per unit, or a cost-plus model and the insourcing company is responsible for meeting all production targets. However, not all insource companies offer the same services, benefits and areas of expertise. nGROUP Performance Partners is a unique example of a company, with both a consulting and an insourcing services, that provides experts in engineered standards and efficiency, labor management with black and green belt certification in Lean Six Sigma, and employee engagement. Not only does nGROUP pay for themselves, they bring expertise to the table that saves companies money by increasing efficiency.

For example, as an insourcing partner, nGROUP was able to achieve a 30% cost savings for Sony Electronics Distribution Center in Carson, CA during a corporate initiative to significantly reduce costs.

By Ryan Cates, Vice President nGROUP

nGROUP has been making the grass greener for labor intensive industries for 15 years. Their award winning nGROUP Performance System (NPS) consistently outperforms other methods, increasing productivity, quality, and morale by reducing labor costs by a minimum of 10-25%. For more information on insourcing with nGROUP, please contact Diron Raines EVP at draines@nGROUP.biz, or Ryan Cates VP at rcates@nGROUP.biz.